Finding the Right Notes to Invest In

Lending Club offers three methods for finding suitable notes to invest in. The method you choose will largely be dictated by your investment objectives including the amount you would like to invest, the time you have to screen notes, and the level of control you’d like to have in the process.

LendingMatch™ is the automatic method for finding notes on Lending Club. To harness the power of this proprietary technology, you simply enter the amount you’d like to invest and set a risk level. Your risk level will determine the mix of credit grades you will invest in and the corresponding interest rate you might expect to receive. The mix will take into account the potential number of notes that you can purchase with your investment amount. With a $100 investment, for example, you could buy 4 notes, so a low-risk LendingMatch portfolio might have two A-grade notes and two B-grade notes. Once you are presented with a LendingMatch portfolio, you can add or remove notes and update investment amounts before committing to an investment. This tool is most useful for investors looking to invest in a large number of notes, but can be used by anyone looking for automation.

One alternative method to LendingMatch is to browse individual notes and choose those that are attractive to you. You can limit the notes shown to only include those that meet your specifications of average rate, credit score of borrower, debt-to-income ratio, number of delinquencies in the last two years, and funding status. After reviewing individual notes, you can select those that interest you and commit to investing in them. Though this method could become tedious for investing in many notes, it gives full visibility into investments and is an option regardless of your investment amount.

A final method is available to investors interested in purchasing notes that were already issued. Those notes can be found on the Note Trading Platform operated by FOLIOfn, a Lending Club partner. In addition to screening notes by average rate and status, notes with varying numbers of payments remaining can be shown. Notes that meet your criteria can be sorted by additional parameters, such as Yield to Maturity or Markup/Discount. Selecting a note shows the relevant information, including a link to the original listing as well as any changes to the borrower’s credit score since the note was first issued. Since note trading is a new feature for Lending Club investors, the number of notes available for trade is growing every day.

Once you’ve made the decision to invest in notes with Lending Club, the next step is to find the right notes for you. Whether automating your investments through LendingMatch, fully controlling note selection by browsing individual listings, or screening for tradable notes on the Note Trading Platform, Lending Club offers many ways to match investors with suitable notes. Explore all three of these choices to see which method, or set of methods, works best for you.

** Projected Returns are Lending Club’s modeled return for a subset of Notes, often a Note Grade (A through G) or Subgrade (A1-G5). We calculate our modeled return using that group’s interest rates, expected losses, recovery rates, and service fees. Our model is based on the past performance of loans with similar characteristics as well as certain additional assumptions that could impact future performance. Projected Returns are not intended as a promise of future results and are not representative of the projected performance of any single Note. Individual portfolio results may be impacted by, among other things, the diversity of the portfolio, the exposure to any single Note or group of Notes, as well as macroeconomic conditions. Notes are offered by prospectus filed with the SEC and you should review the risks and uncertainties described in the prospectus prior to investing in the Notes.